The measure was approved at a meeting of the Government’s Cobra emergency committee and announced by Alan Johnson, the Home Secretary.

The Times understands that the decision to raise the threat level is connected to the conference on Afghanistan taking place at Lancaster House, London, next Thursday.

Sources said there had been intensive discussions throughout the day relating to intelligence suggesting a possible attempted “spectacular” by an al-Qaeda affiliated group.

But the shift was also described by one source as “precautionary” rather than rooted in any firm information that an identified terror cell was plotting an attack.

Mr Johnson said: “The Joint Terrorism Analysis Centre has today raised the threat to the UK from international terrorism from substantial to severe. This means that a terrorist attack is highly likely, but I should stress that there is no intelligence to suggest than an attack is imminent. JTAC keeps the threat level under constant review makes its judgments based on a broad range of factors, including the intent and capabilities of international terrorist groups in the UK and overseas.

“In his statement to Parliament on security and counter terrorism earlier this week, the Prime Minister said that the first and most important duty of government is the protection and security of the British people. We still face a real and serious threat to the UK from international terrorism so I would urge the public to remain vigilant and carry on reporting suspicious events to the appropriate authorities and to support the police and security services in their continuing efforts to discover, track and disrupt terrorist activity.”

The threat level was lowered to substantial - meaning an attack is “a strong possibility” - in July last year and a number of counter-terror measures in central London, such as stop and search, have been relaxed.

The terror threat status was first published at the beginning of August 2006 when it stood at severe. It was raised to critical, meaning an attack is imminent, within a fortnight after the transatlantic airline bomb plot was thwarted.

It dropped a rung a few days later but was raised again in June 2007 after the attempted car bomb attacks at a London nightclub and Glasgow airport.

MI5 says the threat levels give “a broad indication” of the likelihood of an attack and assessments are based on "a range of factors including current intelligence, recent events and what is known about terrorist intentions and capabilities".

It adds: "This information may well be incomplete and decisions about the appropriate security response are made with this in mind."